The U.S. Dollar is trading in tight ranges as the week closes with stock exchanges looking downward and the world awaiting clarity on the chances for physical conflict.
Overview
Reports stated that a planned strike on Iran as retaliation for a shot down American drone was canceled. Market participants, as well as world leaders, seem satisfied with the news, but naturally, a flight to safety advanced safe-havens such as the Swiss Franc and gold, the latter quite significantly.
Later today we shall get a look at business investment via the Purchasing Managers Index Composite at 9:45 AM and the housing market at 10 AM with the release of Existing Home Sales. Negativity in the figures could prove to be further evidence of slow activity in the economy and perhaps compiled with the thought of a dovish Fed could create havoc for the buck.
What to Watch Today…
- PMI COMPOSITE FLASH 9:45 AM
- Existing Home Sales 10 AM
Complete Economic Calendar can be found here.
EUR
The Euro has been flirting with appreciation that would put it near its best levels in about four weeks but has failed to maintain it as traders forecast that the European Central Bank could look for ways to also help the financial environment be more accommodative. Lowering interest rates is not an option and what is even more pertinent is that Mario Draghi will be leaving his post as head of the ECB.
There are many options for central bank president, but things could turn if a German financial figure and renowned economist, Jens Weidmann, takes over. His proposal would be to tighten things and of course any sign that points at his appointment will be seen as a Euro positive. A rally for end of the year could come if indeed his approach is different from Draghi and he pushed for no policy that looks to easing measures.
CAD
The Canadian Dollar is near its best levels since February, propelled by fears of oil supply issues in case of a conflict in the Middle East. Additionally, the “Loonie” is finally improving on the basis of potential for improved economic growth as USMCA is on its way to being ratified and President Donald Trump hailed the pact’s potential for all three members of the pact. We see the currency flourishing as long as a contraction in indicators fade and actual growth manifests itself in late Q3, Q4 data.
